The Finance Minister, P Chidambaram, presented the last budget of the UPA-2 government in Lok Sabha on February 17. With the general elections set to take place in the next couple of months, the budget exercise was an interim one, also referred to as ‘vote-on-account’. The vote-on-account was presented to seek approval for the expenditures to be incurred by the government in the next few months, until the new government is formed and a full-fledged budget is presented for FY15.
While presenting the interim budget, the finance minister juxtaposed the Indian economy against the global economy citing parallels on the economic situation with some of the developed economies of the world. He noted that the Indian economy has been able to sail through the global risks mapped out in Global Risks 2014 report. In his discourse over the performance of the UPA-2 over the last year or so, he seemingly messaged that ‘all is well’ with the Indian economy and noted the key achievements. Also, as expected, Chidambaram did not miss the opportunity to present his and his party’s vision and roadmap for the future which entailed fiscal consolidation, measures to control the current account deficit, price stability and growth, sector reforms, sharing of responsibility between the states and the Centre.
While detailing the achievements of the UPA, the finance minister stated that the fiscal deficit for 2013-14 will be contained at 4.6% (below the red line margin of 4.8%) of the GDP and the current account will be contained at $45 billion. He also pointed out the key achievements of his government in the past one year which included correction of diesel prices, rationalisation of rail fares, the National Food Security Act, the new Companies Act. He also spurned the charge of ‘policy paralysis’ which the incumbent government has had to face over the past couple of years and stated that the Cabinet Committee on Investment had cleared 296 projects by the end of January 2014. As a pre-poll sop, Chidambaram announced a moratorium period for interest on all education loans borrowed upto March 31, 2009 and outstanding on December 31, 2013. This, along with a number of budget allocations for the needy seemed suggestive of a populist posturing of the government, just before the elections.
The vote-on-account does not seek to make variations in the direct taxes nor does it seek to make any other policy announcements. Keeping in